Overseas Bank Interest

[tax222]

Hello,
I have inherited some money overseas, and wish to hold it there for the foreseeble future, as interest rates are more favourable.
I an UK resident and domiciled, and will be declaring the bank interest earned on a UK tax return.
The net interest (after deduction of tax) will be paid back into the same account, thus compounding the capital amount every year.
So in the future, when I decide to bring all or part of the funds to UK, will the amount be classified as a remittance for income tax purposes, even though I have been declaring and paying the tax on the interest?

Thank you and regards

[etf]

Hi tax222

The remittance basis is an alternative tax treatment available to people who are resident in the UK and who are either:

-not domiciled in the UK or

-not ordinarily resident in the UK.

Assuming you are regarded as resident and ordinarily resident for UK tax purposes, you will be taxed on the arising basis and not be entitled to claim the alternative remittance basis. This means you will be liable to pay UK tax on your worldwide income and gains, wherever those arise or accrue.

Kind Regards

etf

http://theexpatriatetaxfactory.com

[tax222]

Hi etf,
Thank you for your reply.
Sorry I posted it wrong, what I mean't was the arising basis as you have correctly stated. I am Resident,OR & domiciled in the UK.
So I would pay my tax in the UK on the arising basis, but what if I decide in the future to bring the capital and taxed income to the UK, will there be any further implications regarding income tax?

regards

[tax_schmax]

Reinvested net income is capital. No extra tax would be due. Keep good records.

[tax222]

Thank you for your reply tax_schmax.